Survey Finds Growth Challenges 6x More Likely Without Finance and Accounting Partners
Key Findings
100% of Nonprofit leaders outsource at least one business function, but only 30% work with a finance and accounting partner.
Nonprofits working with a partner are over 6X less likely to struggle with scaling their financial function to support growth.
72% struggle with turnover in the financial function at least occasionally.
36% frequently or very frequently experience cash flow issues.
93% of Nonprofit leaders report needing to reclassify funds more than once per year.
The biggest benefit of working with a finance and accounting partner is gaining more time to focus on mission-driven activities.
Download the 2025 Nonprofit Leaders Report
Executive Summary
In collaboration with Cascade Insights, BTQ Financial (a division of Consero Global) surveyed 100 Nonprofit leaders, including CEOs, COOs, Executive Directors, and Founders, about their top financial challenges and opportunities for 2025.
All respondents represent Nonprofits operating in large metro areas within the United States, with annual revenues ranging from $3 million to $200 million. Participants lead a wide variety of Nonprofits, including human and health services, animal welfare organizations, and charitable or social service organizations.
With nearly one-third of respondents working with a third-party finance and accounting partner, this whitepaper highlights the core benefits of these partnerships, particularly in addressing key challenges such as assessing financial sustainability and risk, ensuring accurate and timely financial reporting, and meeting audit deadlines and regulations.
Our research reveals disparities in financial management between Nonprofits that utilize third-party partners and those that do not. Partnered Nonprofits report more accurate budgets and financial forecasts and greater success in meeting regulatory deadlines.
Nonprofit organizations face unique challenges in managing their finances. While inflation and tightening donor resources strain their budgets, they simultaneously have growing demand for their services.
Health and human service providers that rely on government funding face additional hurdles, including increasingly complex compliance requirements, stricter reporting mandates, and intensifying competition for limited funds.
To thrive in this environment while fulfilling their missions, nonprofits need robust financial operations that ensure transparency, promote good stewardship, and secure long-term sustainability.
This article summarizes the comprehensive eBook from BTQ Financial, offering insights into how nonprofits can strengthen their financial operations, which you can download below:
Health and human services nonprofits play a crucial role in addressing critical community needs, yet many find themselves caught in a cycle of poor financial governance due to several common factors:
Emphasis on mission over administration: Decision-making tends to prioritize programmatic activities while viewing administrative functions as secondary
Weak financial functions: Without robust financial infrastructure and professional expertise, organizations struggle to meet accounting and reporting demands
Limited financial literacy: Knowledge gaps make discussions about fiscal governance intimidating or non-existent
To break this cycle, nonprofit leaders must shift their perception and recognize strong financial functions as strategic assets that:
Empower mission fulfillment
Build constituent and donor trust
Navigate complex regulatory landscapes
The Finance as a Service (FaaS) Solution
Nonprofits are increasingly adopting Software as a Service (SaaS) platforms and outsourced services to achieve greater efficiency, scalability, and enhanced capabilities. Finance as a Service (FaaS) extends this approach to financial management.
What is FaaS?
FaaS is a managed services approach that helps mission-driven organizations transform their financial operations while saving money, maximizing government funding, and minimizing risk.
It provides access to a comprehensive, cost-effective suite of expert-driven financial management services, eliminating the need to build and maintain these functions in-house.
Greater focus on mission: By outsourcing administrative and financial burdens to experts, nonprofits can reinvest valuable time and resources into program delivery
Faster funds collection: Timely and accurate invoicing accelerates billing cycles and fund collection
Improved cash flow: Efficient cash management increases working capital and enhances financial resilience
Compliance assurance: Working with nonprofit regulation experts ensures organizations meet reporting requirements for government funding
Timely and accurate reporting: Automation and streamlined processes provide accurate information for donors, stakeholders, and regulatory requirements
Strategic
Enhanced operational efficiency: Financial professionals optimize processes and reduce strain on in-house leadership
Reliable forecasting: Advanced software managed by expert eyes yields stronger insights for planning
Greater transparency: Accurate reporting improves organization-wide financial visibility and literacy
Long-Term Impact of Strong Financial Management
Strong financial management secures nonprofits’ ability to fulfill their mission and maintain constituent trust. Properly implemented systems allow organizations to allocate resources to initiatives that align with core goals and contribute to lasting change.
Maximized impact: Effectively managed finances provide the resources needed to deliver core services
Long-term sustainability: Robust financial functions promote stability during economic and funding challenges
Increased competitiveness: Financial stability enhances nonprofits’ ability to secure grants, contracts, and donations
Enhanced scalability: Financial plans tailored to growth initiatives help organizations expand programs and introduce new services
Strengthened stakeholder confidence: Solid finances and transparent reporting demonstrate good stewardship to donors and funders
In the challenging landscape of nonprofit management, financial stability is crucial for mission success. This case study explores how The Door, a renowned New York City youth services organization, strategically partnered with BTQ Financial to transform their financial operations during a critical organizational transition.
The Door’s financial transformation journey offers valuable insights for nonprofit leaders facing similar challenges in today’s fast-moving and resource-constrained environment.
Since 1972, The Door has served as a vital resource for thousands of teenagers and young adults in New York City annually. This multi-service nonprofit organization provides comprehensive support services including:
Health care and mental health services
Education and legal assistance
Workforce development
Supportive housing
Arts, sports, and nutrition programs
The organization’s innovative whole-person approach has gained worldwide recognition as one of the most effective models for delivering human services to young people.
The Challenge: Navigating Organizational Transition
In 2021, CEO Kelsey Louie joined The Door with the mission of leading the organization through a significant transition:
Ending a two-decade partnership with University Settlement
Rebuilding administrative functions
Establishing new systems while maintaining uninterrupted services
This transition presented unique challenges, particularly in financial management. The organization needed to maintain fiscal stability while implementing new structures and training staff—all without disrupting their essential youth services.
Solution: BTQ’s Finance as a Service (FaaS)
With 14 years of experience working with BTQ across two executive roles, Kelsey recognized the value of their Finance as a Service (FaaS) model. Driven by a “No margin, no mission” philosophy, he approached BTQ to strengthen The Door’s financial position.
Key Objectives for Financial Enhancement:
Remain good stewards of public and private funding
The decision to partner with BTQ instead of hiring an in-house CFO and finance team was based on several strategic considerations:
Speed and Efficiency: BTQ offered immediate expertise without lengthy recruitment processes
Cost-Effectiveness: The FaaS model delivered better value than maintaining an in-house department
Talent Retention: Circumvented the challenge of finding and keeping qualified finance staff in a competitive job market
Expertise: Access to a team of experts rather than relying on a single person’s knowledge
Change Management: A Thoughtful Implementation
Recognizing the sensitivity of financial transitions, Kelsey emphasized the importance of careful change management. BTQ’s people-first approach ensured a smooth process through a three-pronged strategy:
Reviewing audits and fiscal reporting
Building financial operating structures and systems
Implementing day-to-day operations
BTQ provided crucial guidance throughout the transition, helping prepare Kelsey for discussions with the board and staff while maintaining a comfortable pace of change.
Beyond Outsourced Finance: A Knowledge-Sharing Partnership
The relationship with BTQ has evolved beyond traditional outsourcing to become deeply integrated with The Door’s operations.
Current BTQ Services:
Producing monthly financial reports, including cash flow forecasts and dashboards
Conducting monthly spend review meetings with department heads
Creating year-end spend projections for each department
Continuously monitoring accounts receivable and cash flow
Ensuring audit and tax filings remain up-to-date
Providing regular reports to the organization’s finance committee
Additional Value:
Strategic Partnership: BTQ serves as thought partners, not just financial advisors
Subject Matter Expertise: Access to specialized nonprofit financial knowledge
Knowledge Enhancement: Rather than relying on a single CFO’s experience, The Door benefits from BTQ’s collective expertise—a “brain trust” of financial and nonprofit professionals
Lasting Impact: Strengthened Mission Delivery
By partnering with BTQ, The Door has positioned itself for sustainable growth and enhanced mission delivery. The relationship has:
Enabled The Door to focus more resources on serving youth
Provided tools for better financial forecasting and strategic planning
Ensured financial stability during a significant organizational transition
As Kelsey notes: “The number-one reason The Door went with BTQ was their expertise and financial strength. But in a fast-moving landscape in which recruiting quality talent is hard and resources are difficult to access, the advantages of our partnership extend across our entire organization, securing our ability to thrive.”
About BTQ
BTQ, a division of Consero Global, provides quality financial management and medical billing services specifically for nonprofits. Since 2001, we have helped organizations build strong financial functions that support their missions and ensure sustainable operations.
Our approach combines decades of nonprofit financial management expertise with high-performing digital technologies, empowering organizations to thrive in today’s challenging landscape.
Get in touch for assistance with your organization’s financial transformation.
